Altria takes stake in Juul ecigarettes for US$12.8 bln
NEW YORK: US tobacco giant Altria, maker of major brands such as Marlboro and Chesterfield, announced that it will buy a 35 per cent stake in popular e-cigarette maker Juul for US$12.8 billion.
The deal comes as US regulators increase scrutiny of usage among young consumers of the fast-growing vaping products that tobacco companies hope will compensate for declines in conventional cigarette sales. The investment more than doubles the value of Juul to US$38 billion.
“We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes,” Altria CEO Howard Willard said in a statement.
“Through Juul, we are making the biggest investment in our history toward that goal.”
E-cigarettes expose smokers to significantly lower levels of potentially toxic substances, except for nicotine, the US National Academies of Sciences, Engineering and Medicine said this year. Converting conventional cigarette users to vaping would therefore reduce the number of cancer cases.
Juul CEO Kevin Burns described the Altria investment as ‘unlikely’ and said he was ‘sceptical’ that a conventional tobacco company could align with its objectives.
“But over the course of the last several months we were convinced by actions, not words, that in fact this partnership could help accelerate our success switching adult smokers,” Burns said in a statement. — AFP